Israeli Prime Minister Benjamin Netanyahu accused the Islamic Hamas movement, the Palestinian government’s new partner, of kidnapping three Israeli teenagers in the West Bank last week.

“This morning I can say what I refrained from saying yesterday before the extensive wave of arrests” in the West Bank, Netanyahu said at a cabinet meeting today in Jerusalem. “Those who carried out the kidnapping of our youths are members of Hamas,” the prime minister said, according to a text message from his office.

Israeli security forces arrested about 80 Hamas operatives and officials in the West Bank overnight, the army said. Netanyahu’s remarks are “stupid,” Sami Abu Zuhri, a Hamas spokesman in Gaza, said in an e-mailed statement. He didn’t confirm or deny the allegations.

Hamas held Israeli soldier Gilad Shalit captive in the Gaza Strip for five years before freeing him in 2011 in exchange for Palestinian prisoners.

Netanyahu has ordered the military to “prepare forces for any scenario.” Israeli Defense Minister Moshe Ya’alon spoke of “broad intelligence and operational efforts” in the West Bank and Channel Two said a division of paratroopers was sent to the area.

The benchmark TA-25 index dropped as much as 0.5 percent today, the most since April 23, and was down 0.4 percent to 1,391.68 at 11:53 a.m. in Tel Aviv.

Yaniv Pagot, chief strategist at Ramat Gan, Israel-based Ayalon Group Ltd., attributed the decline to “a gut reaction” by investors and said that as long there was no escalation, the kidnapping wasn’t likely to have a long-term impact on the market. The yield on the benchmark government 2024 bond slipped 2 basis points to 2.86 at 12:07 p.m. in Tel Aviv.

Netanyahu has linked the abduction of the teens to Hamas’ entry into the Palestinian government earlier this month.

“What’s happening on the ground since Hamas entered the Palestinian Authority is a disaster,” Netanyahu said yesterday. “This is the result of allowing a murderous terror organization into the government.”

Hamas, which controls the Gaza Strip, teamed up June 2 in a government with Palestinian President Mahmoud Abbas’s Fatah faction, which rules over parts of the West Bank, after peace talks with Israel collapsed in April.

Hamas is considered a terrorist organization by Israel, the U.S. and European Union, and Netanyahu has shunned the new Palestinian government.

Without confirming a kidnapping, Osama Hamdan, a Hamas official in Lebanon, told Al-Quds television yesterday that the disappearance of the teens “proved that resistance to Israel hasn’t been stifled.” He urged the kidnappers, “if there indeed were kidnappers,” to demand the “highest price” for the teens’ return.
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Israel traded more than 1,000 Palestinian prisoners in 2011 for the return of Shalit, who was captured outside Gaza. Foreign Minister Avigdor Liberman, who opposed the Shalit deal, said he would oppose any agreement that would release Palestinian security prisoners.

“There will be no more freeing of Palestinian terrorists sitting in Israeli prisons, not in the form of a gesture, or in any other way,” Liberman said on Army Radio today.

The teens disappeared at a time when Palestinians have been holding rallies across the West Bank in support of more than 100 Palestinians staging hunger strikes in Israeli prisons.
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Netanyahu said he holds the Palestinian Authority responsible for the abduction because the kidnappers came from territory under its control. Abbas’s office has said the Palestinian Authority wasn’t responsible for the disappearance of Israelis in an area of the West Bank Israel controls.

Israel captured the West Bank in the 1967 Mideast war. The territory is home to 2.3 million Palestinians who claim it as part of a future independent state.